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Asia Pacific Market: Stocks up on Fed rate hike talk

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Capital Market
Last Updated : Aug 30 2016 | 10:28 PM IST
Asia Pacific share market advanced on Tuesday, 30 August 2016, as risk sentiments supported by strength on Wall Street overnight and on rising expectations of an interest rate increase this year by the US Federal Reserve.

Investors appeared to be more comfortable with the prospect of the Federal Reserve raising interest rates this year. The Fed last December delivered its first rate increase in nearly a decade. The focus is now on US nonfarm-payroll data for August due on Friday, 2 September 2016.

The Jackson Hole symposium for central bankers has left investors debating the outlook for monetary policy. A highly-anticipated speech from Janet Yellen, the Fed chair, was upbeat about the US economy but gave few hints as to when the central bank would pull the trigger and lift the federal funds rate.

Stanley Fischer, the Fed vice chair, who had made some hawkish comments a week ago, helped boost bets on a near-term rate rise when he said the next set of US jobs data - due this Friday - was key in determining the next rate rise.

Among Asian bourses

ASX200 bounces 0.17%

Australian share market finished higher, as risk sentiments supported by overnight strength on Wall Street and upbeat U.S. consumer spending data. Most of ASX sectors bounced, with shares of bullion, mining, energy, materials, realty, and energy blue-chip companies being major gainers. At close of trade, the benchmark S&P/ASX 200 index rebounded 9.10 points, or 0.17%, to 5478.30. The broader All Ordinaries grew 12 points, or 0.22%, to 5573.50.

National Australia Bank gaining 0.6% and 0.8% respectively. The banking sector has been under pressure recently due to slowing earning growth and pressure on margins.

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Gains in basic materials were led by Evolution Mining, which was 5.3% higher as gold rebounded from a near five-week low. Fortescue Metals gained 3.5% on the back of S&P upgrading its rating outlook.

Oil stocks gained as oil futures edged up on a weaker dollar. Oil explorer Oil Search Ltd posted a 2% gain.

Japan Stocks ease on profit booking

The Japan share market closed marginally down, due to profit booking after weaker than expected official data on Japan's household spending and unemployment rate for July 2016. Total 17 out of 33 TSE sectors declined with Land Transportation, Information & Communication, Air Transportation, Construction, and Textiles & Apparels issues being major losers, while Nonferrous Metals, Banks, Oil & Coal Products, and Marine Transportation issues registered notable gains. The Nikkei average lost 12.13 points, or 0.07%, to end at 16725.36. The Topic index fell 0.43 point, or 0.03%, to end at 1312.81.

Shares of retailer companies declined after data released before the market opened showed Japan's household spending fell 0.5 percent on-year in July. Japan's retail sales slipped 0.2 percent on-year in July. Also souring sentiments was Japan's seasonally adjusted unemployment rate for July which came in at 3 percent, a touch lower than June's 3.1 percent and the lowest since 1995. Department-store operator Marui Group Co. dropped 2.7%, while Fast Retailing Co., the operator of Uniqlo, was little changed after falling as much as 0.7%.

A gauge tracking automakers extended Monday's 3.9% gain, adding 0.6% Tuesday as bellwether Toyota Motor Corp. advanced 0.6% to the highest close since March.

Electronic-equipment maker Hitachi climbed 0.4% on reports the company plans to cut costs by 200 billion yen ($2 billion) this fiscal year and improve efficiency to meet its operating profit forecast.

China Market rises marginally

Mainland China stock market closed slight higher, supported by strength in banking shares, shaking off generally weak earnings reports and concerns about bad loans, although the selling in transport stocks left major indexes little changed. The CSI300 index, which tracks the largest listed companies trading in Shanghai and Shenzhen, inclined 0.13% to 3311.99 points. The Shanghai Composite Index closed up 0.15% at 3074.68 points while the Shenzhen Composite index closed up 0.06% at 2028.36 points.

The rebound in banking shares occurred despite eroding margins and mounting bad loans seen in the latest earnings reports from the sector. While conditions are weakening, traders said investors were relieved that interim results did not indicate a rapid deterioration in asset quality many had feared.

China's markets have struggled to make headway amid growing perceptions that the central bank is in no hurry to ease policy soon, for fear of adding to already high debt levels and stoking asset bubbles.

Policymakers have shifted their focus to ramping up fiscal spending instead, but shares in companies that stand to benefit most from an infrastructure building spree have been unable as yet to gain much traction.

Hong Kong Market rises on Fed rate hike talk

The Hong Kong stock market inclined on tracking gains in Wall Street overnight, rising expectations of an interest rate increase this year by the US Federal Reserve, and after the CSRC disclosed that the Shenzhen-HK Connect program will be launched at mid-November. The benchmark Hang Seng Index added 194.77 points, or 0.85%, to 23016.11 points. The Hang Seng China Enterprises Index, benchmark measure of performance of mainland China enterprises, rose 99.43 points, or 1.05%, to 9597.25. Turnover increased to HK$60.9 billion from HK$54 billion on Monday.

Tencent (00700) jumped 1.7% to HK$204.8 on news that the NDRC plans to build a new batch of internet-plus innovative platforms in 2-3 years.

Market speculations saying that iPhone 7 will be launched on 7 September. Its supply chain OEMs soared across the board. ACC Tech (02018) rose 3.6% to HK$89.5. Tingyi (00322) plunged 5.8% to HK$7.45 after it reported interim earnings decline of 65%. AAC will replace Tingyi at 2 September, becoming HSI constituent.

Stocks listing on both HK and Shenzhen bourses also shot up after the CSRC disclosed that the Shenzhen-HK Connect program will be launched at mid-November. Zhejiang Shibao (01057) surged 7.4% to HK$10.7. China Vanke (02202) also put on 2.3% to HK$199.92. Bright Smart (01428) soared 7.6% to HK$2.69. First Shanghai (00227) jumped 6% to HK$1.41.

Indian Market gains on positive global cues

Auto, IT and banking stocks and index heavyweights HDFC and ITC led strong gains for key benchmark indices. The barometer index, the S&P BSE Sensex, jumped 440.35 points or 1.58% to settle at 28,343.01. The Nifty 50 index rose 136.90 points or 1.59% to settle at 8,744.35.

Wipro rose after the company announced a partnership with Stibo Systems, a global leader in multi-domain Master Data Management (MDM) solutions. Oracle Financial Services Software dropped on turning ex-dividend. Maruti Suzuki India nudged higher after the company announced the launch of sporty Swift Deca, a limited edition model of its most popular hatchback. Bharti Airtel extended recent losses triggered by the company slashing rates for prepaid internet data plan. Coal India rose after the company announced that it has fixed 9 September 2016 as the record date for the purpose of buyback of equity shares.

Elsewhere in the Asia Pacific region: New Zealand's NZX50 rose 0.3% to 7387.95. South Korea's KOSPI index added 0.4% to 2039.74 Taiwan's Taiex index rose 0.39 point to 9110.56. Malaysia's KLCI fell 0.2% to 1678.06. Singapore's Straits Times index eased 0.04% to 2828.39. Indonesia's Jakarta Composite index dropped 0.2% to 5362.32.

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First Published: Aug 30 2016 | 4:05 PM IST

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